Modernising the outsourcing business

Sajeeb Wazed Joy
Left, Sajeeb Wazed Joy, the prime minister's ICT affairs adviser, inaugurates a summit of business process outsourcing at Sonargaon hotel in Dhaka. The government of Bangladesh has undertaken an ambitious goal of creating 200,000 jobs through the BPO sector by 2021. PHoto: BSS/file

The job of executives is changing fast, and so is the appearance of their office. In 2020, the CFO's office of a typical global corporation would comprise a wall made of data screens, also known as a data wall. The wall would display recent computed forecasts of financial parameters such as revenue and profit, along with insights about the business. There would also be a hub to monitor the bots performing financial transactions and reporting. Even during the end of the quarter, the staff would not be burdened with work as all the business processes would have been outsourced to one or multiple service providers, and the CFO, in his/her corner office, would be seen immersed in the present and future business matters of the organisation, instead of past issues.

The business process outsourcing (BPO) industry in Bangladesh is growing at breakneck speed. According to Bangladesh's Department of Information and Communication Technology (ICT), the export revenue of the BPO industry has been growing rapidly. At present, the industry employs more than 40,000 educated Bangladeshi workers. The government of Bangladesh has undertaken an ambitious goal of creating 200,000 jobs through this sector by 2021.The good news is that a few globally competitive companies have emerged in Bangladesh in recent years. They have successfully acquired outsourcing contracts from overseas companies and are delivering services from their offshore centres in Bangladesh. These companies will lead the necessary growth to realise the country's national ambition. At the same time, these companies need to get ready for the business of the future.

Modernising the business of outsourcing is going to be the key driver for all leading BPO companies in the world. The outsourcing journey of an organisation starts with outsourcing non-core processes and most large global business corporations have already begun this journey. They are now moving to the next level and are identifying semi-core and knowledge-intensive business processes as avenues for outsourcing. Outsourcing companies in Bangladesh also need to get ready to move up the value chain and acquire capabilities of servicing more complex processes.

Modernising the business of outsourcing would also mean modernisation of the services pertaining to the processes that have already been outsourced. For example, many companies outsource the processes of accounts receivables from their finance function to an identified service provider. Today, a good number of those processes are being performed by computer software-based robots or bots. BPO companies that have acquired the capabilities to deliver services and improve efficiency by using bots will have more luck in having their contracts renewed. In fact, many large outsourcing contracts are evolving into a gain-share partnership where the service provider must improve through automation to deliver business benefits to its customers and remain as a profitable business.

Modernising the business of outsourcing would also mean improving controls within the processes. Traditional ways of outsourcing would require service providers to standardise processes to implement effective control over them. Standardisation would also bring a lot of transparency into the processes. Today, technological advancements have automated several controls. Technology has made controls efficient, consistent and predictable. More importantly, technology has made operational matters of an outsourced service predictable. Today, it is possible to forecast the volume of work on different days and to plan work allocation accordingly. Customers today expect their service providers to have such capabilities.

Most companies have been able to rebalance their resources after successfully outsourcing their internal functions. They have allocated staff to focus more on data and to spend more time on identifying risks and opportunities. For example, staff members in the finance function were given the task of analysing data more frequently and in a more comprehensive fashion once their job on payables and receivables was outsourced. The effective analysis resulted in the improvement of business performance such as reducing working capital requirements, collecting receivables faster and reducing the risk of debtor defaults. Thus, outsourcing certain processes has helped organisations modernise the operational processes that delivered business benefits. Many such companies are expecting to outsource such modernised operational processes. Outsourcing service providers will require the capabilities to deliver such modernised processes and results for their customers. Thus, BPO companies of the future will be recognised by their ability to develop insights for their customers.

Each year, more than 1,000 large BPO contracts get signed globally, according to the independent observing agencies. A good number of such contracts are mega deals—that is, contracts with significantly high value. The contracting trend is moving towards executing a greater number of contracts with smaller contract values. This will help BPO companies in Bangladesh compete effectively in the coming years and also build capabilities and capacities at a realistic pace. Furthermore, modernisation of the existing capabilities will help them get ready for future contracts.

BPOs in Bangladesh have an advantage due to the high availability of workforce. The young population of the country comprises a vast pool of educated youth who are ready for on-the-job training and deployment. A good number of them are fluent in English. However, such skills are unlikely to be sufficient for future service needs. The workforce of the future will be required to deliver services using sophisticated technology. They will also be expected to possess problem-solving skills. The stakeholders responsible for skills development—that is, education providers, policymakers, and vocational training designers—should focus on such requirements and plan for the development of the workforce accordingly.


The writer is a partner at PwC. The views expressed here are personal.


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